Taysha Gene Therapies (TSHA) Shares Plunge 7.99% as Biotech Skepticism Overshadows Regulatory Optimism

Taysha Gene Therapies (TSHA) shares fell to their lowest level since October 2025, with an intraday decline of 7.99%, marking a 2.46% drop in trading. The sharp sell-off follows a period of heightened regulatory and clinical optimism for the biotech firm’s lead gene therapy candidate, TSHA-102, which had recently driven a surge in investor sentiment.

The stock’s recent volatility stems from a combination of regulatory milestones and strategic updates. Earlier in October 2025, the FDA granted Breakthrough Therapy Designation to TSHA-102, a gene therapy targeting Rett syndrome, a rare neurodevelopmental disorder. This designation, based on preliminary data showing a 100% response rate in 12 patients for key developmental milestones, accelerated regulatory review and positioned the therapy as a potential first-of-its-kind treatment. However, the recent decline suggests market skepticism about the long-term sustainability of these gains, particularly amid cautious investor sentiment toward small-cap biotechs.

Analysts had previously upgraded TSHA’s outlook, citing the FDA’s alignment on the pivotal trial design for TSHA-102. The trial, a single-arm, open-label study involving 15 patients, is structured to support a Biologics License Application (BLA) submission. The inclusion of a 6-month interim analysis, which demonstrated an 83% response rate in high-dose participants, was seen as a catalyst for accelerated approval. Despite these advancements, the stock’s pullback indicates that investors remain wary of the trial’s small sample size and the need for longer-term data to confirm durability of response.

Market reactions to the recent developments have been mixed. While institutional analysts maintained bullish ratings, retail traders reported heightened caution, with some exiting positions due to concerns over Taysha’s financial leverage. The stock’s prior 53.5% surge to a three-year high in early October had inflated its valuation by $1.2 billion, creating a contrast with its current subdued performance. This divergence highlights the inherent volatility in clinical-stage biotech stocks, where regulatory progress is often met with rapid profit-taking or risk-off behavior.

Looking ahead, Taysha’s ability to execute on its REVEAL trial timeline and deliver robust interim data will be critical. The company aims to begin enrollment in late 2025, with a potential BLA submission as early as 2026. However, the absence of a large patient population and the need for independent validation of outcomes remain key risks. If the trial confirms TSHA-102’s efficacy, the therapy could redefine treatment paradigms for Rett syndrome and solidify Taysha’s position in the gene therapy landscape. Until then, the stock’s trajectory will likely remain tied to incremental updates and broader market risk appetite.